Changshu Bank (601128): Unstoppable consolidation leader

Changshu Bank (601128): Unstoppable consolidation leader

Event On April 25, 2019, Changshu Bank released its 2018 annual report and 2019 quarterly report, and realized revenue growth in 18 / 19Q1.

15% / 19.

25%, net profit attributable to mothers increases by 18.
.

12% / 20.

96%.

Brief comment on the revenue in 1 and 18 years, the growth rate of net profit has increased, and the growth rate in 19Q1 once again increased the operating income in 201858.

24 ppm, an increase of 16 in ten years.

56%; net profit attributable to mother 14.

86 ppm, an increase of 17 in ten years.

54%.

From a single quarter point of view, 4Q revenues increase by 12 per year.

06%, 9% faster than last quarter.

90 averages; 4Q net profit starts from zero1.

24%, a growth rate of 27 from the previous quarter.

93 units.

In terms of revenue structure, net interest income rises by 17 per year.

92%, non-interest net income goes up every year.

77%.

ROE attributable to common shareholders reached 12.

62%, an increase of 0 over the previous year.

10 averages; EPS is 0.

67 yuan, up 17 from the previous year.

54%.

The BVPS attributable to ordinary shareholders at the end of the year was 5.

67 yuan, down slightly earlier.

35%, mainly due to the increase in equity caused by convertible bonds.

1Q1 operating income 15.

37 ppm, an increase of 19 in ten years.

25%, an earlier growth rate of 6 in the first quarter.

75 units, net profit attributable to mother 4.

470,000 yuan, an increase of 20 in ten years.

96%, an increase from the earlier first quarter4.

20 units.

Of these, █’s net income increased by 17 per year.

84%, non-interest income increased 29 in ten years.

69%.

The annualized legal average ROE is 13.
4%, up 0 in the first quarter of 2017.
03 averages.武汉夜网论坛

EPS is 0.

20 yuan / share, BVPS is 5.

86 yuan / share.

2. In 18 years, NIM has stabilized and rebounded, and the annual net interest income of 9bp rises by 50 for 50 years.

99 ppm, an increase of 17 per year.

92%, accounting for 87% of revenue.

56%, 1 year up.

03 averages.

NIM reached 3 in 18 years.

00%, 9bp higher than the previous year.

The first is that the comprehensive yield of interest-earning assets increased by 12bp over the previous year, of which the loan contribution was the largest, the average yield increased by 19bp, and the personal loan yield reached 8.

04%, a year-on-year increase of 40bp, staying at the forefront of listed banks, mainly due to the adjustment of retail loan structure, the proportion of personal business loans with higher yields continued to rise.

The comprehensive cost ratio of the interest payment coefficient 都市夜网 decreased slightly by 1bp from the previous year, and the average cost ratio of deposits increased by 2 due to the proportion of time deposits.

72 digits increased by 3bp, while the peers, bonds and declines to longer than the average cost rate increase.

3. On January 19, 18, non-interest income increased by 7 over the same period due to a large increase in investment income.

66% / 29.

69% 18-year non-interest net income7.

24 ppm, an increase of 0 per year.

520,000 yuan, an increase of 7.

66%, mainly because investment income is affected by changes in accounting standards, and net income for 18 years2.

31 trillion, a great increase of 117 in ten years.

76%.

Net fee and commission income for 18 years3.

67 ppm, a decrease of 13 per year.

42%, mainly affected by the new rules of asset management, agency business process expenses18.

07%.

1Q1 Net non-interest income1.

99 ppm, an increase of 29 in ten years.

69%, net investment return 1.

11 trillion, a big increase of 2095 in ten years.

94%; Net income from litigation fees and commissions is 0.

89 billion U.S. dollars, still affected by the new rules of capital management, a year-on-year decrease of 28.

99%.

4. The non-performing loan ratio shrank quarter by quarter, and the scissors margin was significantly lower than 100% of the total loan at the end of 2018, which was 927.

95 trillion, an increase of 19.

26%; NPL balance is 9.

14 trillion, an increase of 0 earlier.

270,000 yuan, an increase of 3.
00%; NPL ratio is 0.
99%, a decrease of 15 units from the previous year and a decrease of 1bp from the three quarters; it has been at the lowest level in rural commercial banks, and it is only larger than the banks of Ningbo and Nanjing in the entire listed bank.

Considering that most of Changshu’s bank loan business is operating loans, and business loans generally have higher NPL ratios in retail loans, the low NPL ratio of Changshu Bank also fully reflects the rich experience of Changshu Bank in small and micro loan business and itsOutstanding advantages in risk management and control.

At the end of 18 years, the balance of interest loans19.

2.7 billion, accounting for 2.

07%, a decrease of 59bp earlier and a decrease of 5bp in the previous three quarters.

Loan balances overdue for more than 90 days6.

11 trillion, accounting for 0.

66%, a decrease of 18bp in the initial period.

The ratio of loans overdue for more than 90 days to non-performing loans was 66.

80%, down 7 from the end of the previous year.

03 averages, up 4 from 18Q2.

64 averages, but still significantly below 100%.

Provision coverage continued to increase significantly.

The NPL provision coverage ratio was 445.

02%, an increase of 119 over the end of last year.

09 singles, which have continued to rise since listing, and the provision coverage rate far exceeds comparable peers.

Loan provision ratio 4.

38%, an increase of 0 from the end of the previous year.

66 units.

Accrued 15 in 18 years.

4.1 billion, an increase of 3 every year.

5.5 billion; write-off 5.

3.8 billion, a decrease of one year.

7.7 billion.

Total loans for the first quarter of 2019 were 927.

95 trillion, an increase of 19.

26%; NPL balance is 9.

12 trillion, a decrease of 0 from the end of 18 years.

20,000 yuan, 0 non-performing loan ratio.

96%, continued to drop by 3bp from the beginning of the year.

Concerned loans accounted for 1.

95%, a decrease of 12bp from the beginning of the year.

Provision coverage rate was 459.

03%, up 14 earlier.

01 levels, with a loan-to-loan ratio of 4.

39%, an increase of 0 from the beginning of the year.

01 averages.

The size of loans has expanded rapidly in 18 years, and the bank’s loan structure in Changshu has continued to increase the risk of personal business loans. Generally speaking, the non-performing ratio of personal business loans has increased.As a result, the non-performing rate shifted quarter by quarter.

At the same time, the provisioning strength is still very large, and the provision coverage ratio continues to increase; the scissors gap continues to decline and is significantly less than 100%, and the pressure for the recognition of non-performing loans in the future is lighter.
The continuous low non-performing ratio and high provision coverage ratio fully prove that Changshu Bank’s asset quality is excellent, its ability to withstand future risks before it is strong, and at the same time, there is a large space for performance release, laying a firm foundation for future profit growth.
5. The retail business deepened its innovation and transformation, loans continued to grow, and personal business Changshu Bank’s 18-year development of more prominent retail asset services in the business sector has positioned it to accelerate the integration of online and offline channels, and use big data thinking to promote business closed-loop and gradual management., Increase financial support for small and micro business owners, individual industrial and commercial households, and steadily advance the bank’s strategic transformation to a modern retail bank.

Revenue from retail operations in 201824.

190,000 yuan, an increase of 21.

24%, accounting for 41 of total revenue.

53%; net income from retail interest rate 22.

59 ppm, an increase of 23 in ten years.

80%, accounting for 38 of total revenue.

79%; net fee and commission income1.

600,000 yuan, an increase of 36.

67%, accounting for 2 of total revenue.

74%.

On the asset side, the balance of retail loans at the end of 18 was 473.

4.5 billion, an increase of 27.

39%, accounting for more than 50% of the total loan ratio for the first time, reaching 51.

02%, up 3 compared with last year.

The 26 averages continue to rise.

The number of retail loan customers was 24.

840,000 households, accounting for 98% of all customers.

In terms of structure, personal business loans, personal consumption loans, home mortgage loans and credit card loans accounted for 64 respectively.

27%, 19.

49%, 12.

05% and 4.

19%, accounting for a +8 change in the initial comparison period.

01%, -5.

98%, -1.

33% and -0.

70%.

In 18 years, Changshu Bank’s retail loan business innovatively launched “quick loan” products for property mortgage loans, jointly launched the US group business loan, Tencent’s wealth management project, and developed a pure online consumer loan business “non-profit loan”.

On the debt side, the balance of savings deposits at the end of 2018 was 622.

07 billion, an increase of 99 over the end of last year.

640,000 yuan, an increase of 19.

07%, of which the personal time deposit balance was 472.

380,000 yuan, an increase of 23 from the beginning of the year.

37%, accounting for 38% of total deposits.

67% rose to 41.

77%; Changshu Bank takes integrated retail finance as the development direction, develops large deposit certificates, Changhuili, Changhui deposit and other products, launches structured deposits, and is approved for general derivatives trading business qualifications; and deepens cooperation with third parties, Rich Internet payment scenarios, adding Suning, JD.com, and Baidu three channels, expanding WeChat second-class accounts and large-value transfer application functions, increasing the deposit of retail business funds.

6. Focus on financial technology and strengthen financial empowerment. In 2018, 104 fintech projects will be put into production gradually, surpassing the growth rate of 38.

67%.

In the past 18 years, FinTech has focused on the following four aspects: First, it has built a first-rate small and micro financial credit factory that is streamlined, mobile, and online.
Greatly reduce the waiting time for customer business processing and improve the performance of small and micro credit business2.
3 times.

Developed and promoted the mobile workstation system for village and township banks, loaded mobile devices with the credit business of village and township banks, and tripled the performance of village bank customer business implementation.

Independent research and development and promotion of rural collective fund management system, extended to 174 administrative villages in Changshu City, the coverage rate of Changshu City reached 75%.

Second, optimize mobile banking, develop WeChat mini-programs, and promote the offload of counter business.

In 18 years, mobile banking App users reached 60.

990,000, an increase of 43.

1%, the transaction amount is 1447.

69 trillion, an increase of 87%.

Launched the WeChat Mini Program of Changshu Bank and adopted a new social method to expand customer acquisition channels.

Promote the cabinetless paperless system, deploy STM, VTM self-service equipment, run the “personal identification machine”, and the internal cabinet business shunt rate exceeds 80%.

Third, upgrade core systems and improve business implementation performance.

Started the construction of a new generation of “thin core, large, medium, and agile front desk” multi-functional application platform.

Reduce core system load and improve real-time transaction processing capabilities.

The entire bank’s data assets are deposited on the business center, creating a panoramic view of the entire bank’s customer data.

Fourth, use big data technology to improve risk management.

The retail financial big data risk control platform was launched, and the average risk control discrimination time decreased from more than 20 minutes to about 15 seconds.

The online financial one-picture one-reporting system can realize automatic acquisition of information, entity discovery, attribute prediction, and relationship mining, clearly display customer business information, and eliminate risky prompts.

Establish an intelligent business risk early warning system, and change from post-event supervision to real-time supervision. The accuracy of prediction and identification of potential risk customers is 73%.

7. New Bank License Approved, Expanding the Scope of Village Banking Business Changshu Bank has now obtained the first new bank license, and can establish a new village bank in Hainan Province, and gradually carry out village bank mergers and acquisitions across the country.

By the end of 18, Changshu Bank had established 30 Xingfu Village Banks, covering 37 counties in 4 provinces of Jiangsu, Hubei, Henan, and Yunnan, and had 76 branches.

In 18 years, the revenue of village banks accounted for 16 of the total revenue.

80%, the proportion rose by 3.

63 units.

Changshu Bank has a mature village and township business model. Through batched and streamlined business management models, it can quickly merge village and township banks, change the learning period, and quickly expand its business. There is no license limit for new village and township banks. The future development space is large.Income, the proportion of net profit will further increase.

8. The overall capital adequacy ratio was significantly enhanced by the conversion of convertible bonds to equity. At the end of 2018, the core tier one capital adequacy ratio, tier one capital adequacy ratio, and capital adequacy ratio were 10 respectively.

49%, 10.

53% and 15.

12%, a significant increase of 0 at the end of the previous 17 years.

61, 0.

61 and 2.

15 units.

In 19Q1, the core Tier 1 capital adequacy ratio, Tier 1 capital adequacy ratio, and capital adequacy ratio were 11 respectively.

45%, 11.

5% and 15.

02%, which changed by 0 at the end of the earlier 18 years.

96, 0.

97 and -0.

10 units.

The significant increase in capital adequacy in 18 and 19Q1 was mainly due to the conversion of cocoa convertible bonds into shares. According to the announcement of Changshu Bank, May 16, 2019 was set as the mandatory redemption date. Before then, all convertible bonds will be converted into shares.The remaining convertible bond balance in the March 19 announcement.
Calculated at 7.4 billion U.S. dollars, it will increase by 1 at least on the basis of capital adequacy ratio in 19Q1.
28%.

Sufficient capital can meet the capital needs of Changshu Bank in consumer finance companies and mergers and acquisitions of rural banks in the next few years.

9. Investment suggestions From the perspective of 2018 performance, the company mainly has the following highlights: First, its 18-year revenue, net profit and long-term growth, and the growth rate of 19Q1 has increased again.

2018 revenue 58.

24 ppm, an increase of 16 in ten years.

56%; net profit attributable to mother 14.

86 ppm, an increase of 17 in ten years.

54%.

1Q1 operating income 15.

37 ppm, an increase of 19 in ten years.

25%, an earlier growth rate of 6 in the first quarter.

75 units, net profit attributable to mother 4.

470,000 yuan, an increase of 20 in ten years.

96%, an increase from the earlier first quarter4.

20 units.

Secondly, in 18 years, NIM has stabilized and recovered, rising 9bp each year.

NIM reached 3 in 18 years.

00%, 9bp higher than the previous year.

The first is the personal loan yield of 8.

04%, a year-on-year increase of 40bp, staying at the forefront of listed banks, mainly due to the adjustment of retail loan structure, the proportion of personal business loans with higher yields continued to rise.

Third, the non-performing loan ratio has been shrinking quarter by quarter, and the scissors margin has been significantly lower than 100%.

The non-performing loan ratio at the end of 2018 was 0.

99%, a decrease of 15 units from the previous year, and a decrease of 1bp from the end of the three quarters; the non-performing rate in 19Q1 continued to decrease by 3bp to 0.

96%, which is only higher than Ningbo Bank and Nanjing Bank in the entire listed bank.

The low NPL ratio of Changshu Bank also fully reflects the rich experience accumulated by Changshu Bank in the small and micro loan business and its outstanding advantages in risk management and control.
Fourth, the development positioning of more prominent retail asset service business areas.

The 18-year savings balance was 622.

07 million yuan, an increase of 19.

07%, the retail loan balance was 473.

4.5 billion, an increase of 27.

39%, accounting for more than 50% of the total loan ratio for the first time, and continued to rise.

The structure continued to increase personal operating loans to advantageous businesses. While further increasing the yield, it also maintained a continuous decline in non-performing ratios, with significant operating advantages.

Fifth, new bank licenses have been approved to expand the business scope of rural banks.

Changshu Bank has now obtained the first new type of banking license, and can establish a new rural bank in Hainan Province, and carry out the merger and acquisition of the rural bank across the country.

Changshu Bank has a mature village and township business model. Through a batch process management model, it can quickly merge village and township banks, expand its business model, and enjoy policy dividends and license bonuses.

Changshu Bank has always been absolutely leading in the profitability and risk control levels of rural commercial banks, with high growth, high net interest margin, and low non-performing ratio, which has led Changshu Bank to lead comparable peers in fundamental indicators.

The high yield and high proportion of the retail loan business brought by its many years of operating experience and ability accumulation in the small and micro loan business, especially in the operating loan business, are unique, and continue to reduce while maintaining the highest retail loan returns of listed banks.The already low non-performing rate highlights its ability to manage and manage risks.

In addition, the current market value is less than 20 billion, which obviously exceeds that of China Merchants Bank and Ningbo.

The main sources of the small market value premium are: allowable regulatory costs, relatively reduced risks, and regional economic advantages.
Continuously recommended.
We forecast a 20% increase in operating income in 19/20.

50% / 20.

85%, net profit grows by 23 every year.

41% / 25.

50%, EPS is 0.

81/1.

02, PE is 9.

43/7.

51, PB is 1.

23/1.

07, maintain BUY rating, maintain 6-month target price of 12 yuan, corresponding to 2 PB.